Module 4: Stock-Outs

The complete use of existing healthcare interventions would save 60 % of child deaths annually, some 6 million individuals.(1) Nevertheless, the optimal use of healthcare interventions is at best a work in progress. One of the principal difficulties in healthcare interventions is stock-outs.

Stock-outs occur when the demand for an item cannot be met by the current inventory. The items sought often include drugs or vaccines. Stock-outs are most common in “last mile” communities, which are the farthest, most obscure rural communities that are often the ones most in need of medical care. Compounding the problem, these communities are often forgotten by large-scale public health programs. For example, although mass vaccination programs have shown successes on a population-wide demographic, the statistics often do not account for disparities within the population. Consider that vaccine-preventable diseases kill 2.4 million children, most of whom live in rural communities.(2) For its part, vaccination remains among the most cost-effective health interventions known.(3)

In last-mile communities, inventories are even more limited. Although donated drugs are distributed by national authorities to the provinces of a country, they need further transportation to get to the village. This last step requires higher transportation and cold chain costs, especially for large dose pharmaceuticals for diseases such as HIV/AIDS and malaria. Often, administrators at the district level are not aware of the medication shortages in the villages, and the only way that these drugs can reach last mile communities is if healthcare workers leave their patients to do the transportation themselves.(4),(5) The result is an innovation pile-up, where the most recent health technologies never reach the neediest.

A Case Study: VillageReach

In 2000, VillageReach was founded by Blaise Judja-Sato with the aim of improving the reliability and performance of the most remote healthcare systems. The VillageReach model relies on partnering with governments and other organizations. There are two ways in which VillageReach accomplishes its goals. The first is by a logistics and management platform, where a management information system is introduced to track medicines and equipment, a system which improves cold chain performance, delivery of vaccines, and information management. This system is similar to the one used by the United Parcel Service, the world’s largest package delivery company. The second approach is a social business platform, where for-profit social businesses are launched to address infrastructure gaps. These social businesses are designed based on local needs. They also provide crucial services, lower cost, and create jobs. One organization that was launched using this model is VidaGas, which provides propane to rural health centers, and by doing so, replaces outdated kerosene- and wood-based technology, which pose health and environmental hazards.(6) This gas can generate electricity for refrigeration of vaccines, lighting, and sterilization of medical equipment.(7) The profits generated by VidaGas help operate VillageReach.

According to VillageReach President Allen Wilcox, "what is unique about VillageReach is we are trying to enhance systems that exist and leave behind a legacy of infrastructure improvements to allow the system to sustain itself."(8)

The VillageReach model has now been implemented in 251 health centers covering over 5.2 million people in Mozambique, Malawi, and Senegal.(9) The results have also been convincing. In the Cabo Delgado province of Mozambique, after 5 years of VillageReach intervention between 2002 and 2007, vaccine stock-outs decreased from 80 % to 1 %, and vaccine coverage increased from 69 % to 95 %.(10) Furthermore, there was a significant cost savings, where cost was reduced by approximately 25 % from the previous system.(11)

A Second Case Study: A 2010 World Bank Study  

Every year, approximately 15,400 children under the age of five die from malaria.(12) This mortality rate is due in part to defects in supply chains, leading to a lack of drugs in isolated communities. In 2008, a mere seven % of Zambian children under the age of five received the most effective first-line malarial treatment within 24 hours of starting a fever.(13) Fortunately, strategies to improve supply chains can be straightforward and yield effective results. A 2010 study in Zambia conducted by the World Bank showed that using a commodity planner at the district level to ensure smooth delivery of drugs to rural healthcare centers greatly improved supply chains, improving the supply of pediatric malaria drugs by 37 %.(14) Other drug supply chains, such as those used to deliver HIV/AIDS medication, also showed similar improvements.(15) From the results of the study, Era Jawaran of the World Bank said:

“The Zambian government has done very well with mass malaria prevention measures such as distributing treated bed nets and spraying houses, but malaria remains endemic and progress on access to treatment has been slower. We have found that strengthening drug supply chains can make a significant contribution toward extending treatment access and reaching the health MDGs (Millennium Development Goals).”(16)

This study is influential because improving a nationwide supply chain has been infamously challenging. Additionally, the results from the study support initiatives such as VillageReach, which use similar strategies to coordinate supply chains, improving their efficacy and having a considerable impact on communities.  

The Private Entrepreneurship Model: Coca-Cola

Thus far in this module, we have seen the challenges of stock-outs and how it continues to affect thousands upon thousands of individuals in the developing world. Consequently, access to cutting-edge medication must remain a priority in healthcare development. However, other products of the developed world have found their way to the remotest corner of the globe. As Sarah Boseley from The Guardian has noted, Coca-Cola can easily be purchased even in rural villages.(17) Noting this remarkable market penetration, David J. Olson, the director of policy communications at the Global Health Council, has argued that private sector delivery lines can be used to increase the efficiency of delivering medications.(18) Perhaps medications could even be packaged alongside Coca-Cola cans.

Whether or not Coca-Cola supply lines are used, a number of lessons can be learned from the Coca-Cola model. First, close monitoring of the supply chain can identify weak points, which must be addressed immediately to avoid sustained problems. Second, partnering with local organizations can help design effective health promotion messages. Third, adopting healthier behaviors should be made simple for the target recipients. This can mean delivering medications right to the villagers’ doors.(19)

Naturally, there are a number of challenges when translating private sector practices to healthcare delivery. Two of these challenges are maintaining the cold chain and increasing marketing. First, whereas soft drinks can undergo a number of cooling and heating stages without much damage to the product, vaccinations and other medications often contain heat-sensitive proteins, meaning that they need to be protected at cold temperatures for their entire time of transport. Maintaining the cold chain during transportation can be rather challenging, in particular because of electricity shortages, the lack of transportation infrastructure, and the hot climate of many developing countries. Second, Coca-Cola has been successful in part because of its brand name and advertising power, which allows the clear demarcation of shops selling Coca-Cola products with their trademark red and white emblem.(20) These marketing practices are not nearly as well established with drug suppliers, making it harder to communicate the name and purpose of each drug to patients.  

For further discussion on the Coca-Cola model, follow this link.

Go To Module 5: Transportation >>


(1) Jones, G., Stekettee, R.W., Black, R.E., Bhutta, Z.A. and Morris S.S. “How Many Child Deaths Can We Prevent This Year?” Lancet. 362.9377(2003): 65-71. Accessed June 21, 2010.  

(2) Bill and Melinda Gates Foundation. “Vaccine-Preventable Diseases Foundation.” Bill and Melinda Gates Foundation. 2010. Accessed on June 18, 2010.

(3) Visscher, M. “Getting Vaccines Where They’re Needed the Most.” March 2010. Ode Magazine. Accessed on June 18, 2010.

(4) World Bank. “Zambia Study Shows Stronger Supply Chains for Key Drugs Reduce Child Mortality.” World Bank. 2010. Accessed on June 18, 2010.

(5) Pepples, L. “Going the ‘Last Mile’ to Deliver Better Health to Villages in the Developing World.” 4 Sep 2009. Scientific American. Accessed on June 18, 2010.

(6) Visscher, M., 2010.

(7) Pepples, L., 2009.

(8) Ibid.

(9) VillageReach. “About VillageReach.” VillageReach. 2010. Accessed June 23, 2010.

(10) Pepples, L., 2009

(11) VillageReach. “Field Programs.” VillageReach. 2010. Accessed June 23, 2010.

(12) World Bank. “Stronger Drug Supply Chains Can Save Thousands of Children in Zambia and Beyond.” 21 April 2010. World Bank. Accessed on June 21, 2010.

(13) Republic of Zambia Ministry of Health. “Zambia National Malaria Indicator Survey 2008.” Republic of Zambia Ministry of Health. 2008. Accessed on June 18, 2010.

(14) World Bank, 2010.

(15) Ibid.

(16) Ibid.

(17) Boseley, S. “In Katine, a Coke Is Easy to Buy. Medicine Isn’t.” 20 August 2009. The Guardian. Accessed on June 21, 2010.

(18) Olson, D.J. “Markets Have a Role in Delivering Health.” 25 August 2009. The Guardian. Accessed on June 18, 2010.

(19) Gordon, M. “Coca-Cola and Public Health.” 12 May 2009. Global Poverty. Accessed on June 21, 2010.

(20) Ibid.